Crédit Agricole Proposes Banco BPM Merger to Create Italy’s Third-Largest Bank

Crédit Agricole proposed on Monday, November 9, to combine its Italian banking business with Banco BPM, a transaction the French lender says would create Italy’s third-largest banking group. Banco BPM confirmed receiving the proposal and said its board would make a preliminary assessment on November 12. No merger agreement has been reached.

The proposed group would be centered on Banco BPM and remain listed in Milan. Crédit Agricole said it would serve about 6.5 million customers through more than 2,300 branches. The proposal extends an existing relationship: the French bank currently owns 29.6% of Banco BPM, according to its announcement.

Crédit Agricole said the proposed exchange ratio values Banco BPM at a 20% premium relative to the valuation measure used for the contributed businesses. It also proposed a €1 billion special dividend for Banco BPM’s existing shareholders. The bank estimates annual pretax synergies of €800 million; these are projections, not realized savings.

The French lender would contribute Crédit Agricole Italia and controlling stakes in its Italian life and general insurance businesses. Its ownership of the combined company would rise to about 45%, while Banco BPM’s current chief executive, Giuseppe Castagna, would remain chief executive, Crédit Agricole said. Banco BPM’s board has yet to endorse the plan.

The proposal adds a major cross-border dimension to consolidation in Italian banking. Crédit Agricole says the combination would widen its retail, insurance and asset-management offering and support lending to households and businesses. Those expected benefits depend on negotiations, integration and approvals; the companies have not announced binding terms.

Crédit Agricole said completion could come in the second half of 2027. The transaction would require Banco BPM shareholder approval and clearances including from the European Central Bank and Italian authorities. Banco BPM’s November 12 board review is the next stated step, leaving the structure and final terms subject to further talks.